Irish athletes who qualify for grants from National Lottery funds in the World Class and International Class categories are liable for tax. A number of elite athletes are bemused and angry that they may face a bill from the Revenue Commissioners on money awarded through the Irish Sports Council's carding scheme.

"It is like being given money in one hand and then taken away in the other," said an athlete who did not want to be identified.

"Living expenses are to be taxed. That includes food, rent and accommodation," he added. "It is alright if an athlete goes away and trains in another country because that is seen as part of training expenses which are not taxed. But if he or she decides to stay in Ireland then they will be liable for tax because living expenses in Ireland are considered taxable."

"The food thing is what we laughed at. There is no consideration at all for the specific needs of athletes, their diets or the quantities they have to eat. Eating is considered a living expense and we can be taxed on it."

The rule is stated clearly under Income Tax liability in the Regulations and Guidelines for the International carding Scheme for Players and Athletes 1999.

Paragraph 17 states: `'In general payments made to players/athletes which are directly associated with training/competition expenses are not regarded as income for tax purposes but it is the responsibility of the player/athlete to satisfy the Revenue Commissioners regarding the nature of such expenses. However, It should be noted that the portion of the grant awarded in respect of general living expenses may be regarded as income in the same way as income from any other occupation."

Even though money has not yet been released for 1999, another contentious issue, athletes preparing for the Sydney Olympics are already making provision for an end-of-year pay-back to the Government. The regulations state that athletes may opt to have 50 per cent of the total grant applied to general living expenses, which will then be taxed, probably at a rate of 24 per cent.

It is seen as an additional burden on athletes, who having adhered to strict criteria and reached world class levels of performance in order to qualify for the assistance, may now hand back a portion to the tax man. Boxers, in particular, do not have large outlays for equipment and spend a large portion of their grants on living expenses and occasional travel.

"I am very, very excited and pleased that the carding scheme has been introduced. I think it was inspired and a very brave move to make but the administration of it is appalling," said Irish athletics team captain Terry McHugh. "The lateness of grants this year is also a cause for major concern."

John Treacy, chief executive of the Irish sports council defended the scheme saying that the system is better than anything that ever came before.

"They are the revenue constraints we are working with," he said. "Now the athlete has an option to claim cost of living expenses. It is an option that was not included last year. This is a direct response from athletes for the needs of athletes. That's where it came from."

World Class categories range from £15,000 to £24,000 per annum while the International Class award is worth up to a maximum of £9,000 per annum. Last year 81 athletes from a range of sports would have fallen into these categories.

"It is bizarre. It should be treated as a grant and be tax-free. Many people have put their careers on hold to compete for Ireland and have actually lost money. The IDA give out tax free grants and people on the dole are not taxed," said a coach. "There should be a mechanism to allow athletes keep whatever money they are awarded."